Service charge guidelines violation by hotels, restaurants to be viewed seriously: CCPA

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After the recent directive from the Central Consumer Protection Authority (CCPA) to prohibit hotels and restaurants from adding a service charge by default or without the customer's consent to food bills and allowing consumers to report violations, it has now written to Chief Secretaries of all States, union territories and and district collectors across the country to ensure wide publicity of its guidelines.

In a letter to district collectors on July 9, the CCPA said charging a service fee in violation of the rules is an unfair business practise and affects the rights of consumers as a group, and that complaints of this nature must be given top priority. On the basis of this complaint, the district collector may look into a rule breach and submit his findings to the CCPA within 15 days.

The guidelines also stated that the Consumer Protection Act of 2019 gives the CCPA authority to issue any necessary regulations to stop unfair business practises and safeguard consumers' interests.

If a customer finds that a hotel or restaurant is charging a service fee against the rules, the customer may:

- Make a request to the concerned hotel or restaurant to remove service charge from the bill amount.

- Lodge a complaint on the National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation
level by calling 1915 or through the NCH mobile app.

- File a complaint against unfair trade practice with the Consumer Commission. The Complaint can also be filed electronically through e-daakhil portal www.edaakhil.nic.in for its speedy and effective redressal.

- Submit a complaint to the District Collector of the concerned district for investigation and subsequent proceeding by the CCPA. The complaint may also be sent to the CCPA by e-mail at com-ccpa@nic.in

Here are the CCPA guidelines:

- No hotels or restaurants shall add service charge automatically or by default in the bill

- There should not be any collection of service charge by any other name

- No hotel or restaurant has the right to demand a service charge from a customer

- Service charge must be explicitly disclosed to the client as being optional, voluntary, and up to the client's discretion

- Service charge cannot be collected by including it in the food bill and adding GST to the total amount

- Any customer can ask the concerned establishment to deduct the service charge from the bill amount if they discover that a hotel or restaurant is charging one in contravention of the rules.